An iterative algorithm using the relation curve between the detected zero-mode wave velocity and fault distance in distribution network for fault location is presented. About the speed instability of detected zero-mode wave, this paper finds the variation between detected zero-mode wave velocity with the fault distance by analysis and simulation, and gives the distance expression of detected zero-mode wave velocity by using the variation. By combining the expression and fault location formula based on the difference of wave velocity between zero mode component and aerial mode component of traveling wave, it gives the iteration algorithm for fault location. The iterative algorithm avoids the problem of determining the zero-mode wave velocity. The efficiency and reliability of the algorithm are verified by ATP and Matlab.